Warren County Administrator Paul Dusek is looking into the possibility of establishing a new formula for distributing county sales tax revenue to its 11 towns that some county supervisors contend would be fairer way of divvying it up. His research was prompted by supervisors who contend that the present way of appropriating it — on the basis of a town’s total real estate value — isn’t fair, particularly to the smaller, rural communities without expensive lakefront property.
Lake Luzerne Supervisor Gene Merlino has spearheaded the idea of establishing fairer sales tax revenue distributions. He has contended that the rural towns have the same financial needs to maintain infrastructure, but the towns like Lake George, Bolton, Horicon Hague and Queensbury — with plenty of expensive lakefront properties — get far more than their fair share. To date, town supervisors of the communities with ample lakefront property have balked at the idea of re-distribution.
Merlino has also noted that the lakefront and resort property in the county is escalating remarkably in value, while other properties haven’t, leading to an ever-greater gap between the property-rich and property-poor towns.
At a recent Board of Supervisors meeting, he circulated data showing that such a wealth disparity has been increasing dramatically for the counties’ towns over the past 27 years. His figures indicated that Luzerne’s share of income tax revenue dropped by nearly one-third over that time.
Dusek said last week he sympathized with the concerns, particularly how the gap was getting ever wider in revenue distribution.
“We need to answer the questions of how to improve revenue for Warren County’s smaller towns,” Dusek said, noting that the appropriations on assessed value has been the traditional formula.
He observed that reduced sales tax revenue over time means a heavier tax load falls on the property owners in the town’s without pricey property.
“The shift is a real problem,” he said. “We need to look at ways to enhance the revenues of the small towns so it remains affordable for people to live in those communities.”
Warrensburg officials have for years raised the question of the fairness of sales tax distribution, noting that their community hosts very active commercial activity that generates substantial sales tax revenue, but it receives relatively small portion of that money back to help fund town expenses.
For instance, a town like Horicon with plenty of lakefront received about $1.35 million in revenue from sales tax in 2012 — with scant commercial activity that generates the revenue — while Warrensburg received about $756,000 last year.
Queensbury has historically had either a low town tax or none at all — but they also host a wealth of stores and commercial properties that generate sales tax. But Merlino has argued that the residents of the rural towns buy most of their goods and services in Queensbury, because they aren’t readily available in their hometowns — and the small-town residents ought to get a small share of that revenue back.
Merlino has also stressed that state law allows counties to devise their own distribution formulas.
Dusek and others have suggested that the formula might be retained, but a special county fund could be created to distribute money to the assessment-poor towns like Warrensburg, Thurman, Lake Luzerne and Stony Creek.
Although Merlino has cited that a shift of several million dollars in sales tax revenue to the poorer towns would be equitable, he recently suggested to the county leaders that $500,000 be set aside in a special fund for the towns not now getting their fair share.
Dusek said he would be fully evaluating the options for re-distribution, and he’d be presenting suggestions to the board of supervisors in the coming months.
“We need a way that everyone is treated with equity and fairness,” he said.